10:00 AM, 11th October 2022, About 3 years ago 5
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Can someone please advise me whether a deed of variation for a will is our best option?
My mother-in-law died leaving her house worth approx £480,000 to my husband who was her only child. He would like to gift it jointly to our 2 sons who wish to live in it but is worried that if he dies within 7 years, they will have to pay IHT on it.
He thinks that if he gifts the house to me, his wife, and I then gift it to our sons, this would reduce the risk as he thinks I am more likely to survive the next 7 years than he is.
However, I wondered if it would be better to get a deed of variation for the will so that the house would go directly to our sons?
Any advice would be greatly appreciated.
Dawn
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Member Since December 2019 - Comments: 240
11:01 AM, 11th October 2022, About 3 years ago
A deed of variation is how I would do it,I believe there is a time frame from date of death, but would remove the house from your husband’s estate and it would belong to both of your son’s.
If they both live there then no CGT when they sell, but if one moves out, CGT may be payable on a share of the house for the period not their main home.
Lots to think about
Gestapo Fodder
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Member Since August 2022 - Comments: 3
11:20 AM, 11th October 2022, About 3 years ago
Agree with Chris. D of V is a no brainer. To gift it to your wife would then make it part of her estate and would have achieved nothing.
Di Driscoll
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Member Since March 2017 - Comments: 16
11:40 AM, 11th October 2022, About 3 years ago
We used a deed of variation. As far as I remember you have to do that before taking ownership yourselves of the property. And we used a tax expert. But there wasn’t a will. The property had gone from parent to 3 sons, 2 died unmarried with no offspring, so we went back to the inheritance from mum to deed part of it directly to our two sons. We did have to pay cgt when selling but that was in the days when value went up 17% a year.
Seething Landlord
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Member Since January 2020 - Comments: 1099 - Articles: 1
11:50 AM, 11th October 2022, About 3 years ago
Expert advice required here to ensure that you achieve the desired result and avoid any pitfalls. Ideally look for a specialist with STEP membership.
Grumpy Doug
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Member Since January 2016 - Comments: 225
13:46 PM, 11th October 2022, About 3 years ago
He has 2 years from her death to complete the deed of variation. Any competent solicitor will be able to do it. Within our immediate family we’ve done this twice and very straightforward. Just do it now whilst he’s alive. No 7 year rule or CGT as it’s treated as if the sons were the beneficiaries of their grandmother’s estate.